Gasoline Elasticity [link]
Electric Vehicles [link]
- Overview of emissions from the transportation sector.
- Comparison of pathways and policies to reduce emissions.
- Estimating demand elasticity difficult due to simultaneity of supply and demand.
- Instrumental variables can help.
- Review three papers using three different methods to estimate the same parameter.
- Electric vehicles
- Review of consumer demand and social benefits
Required reading and response questions
Read Knittel (JEP 2012)
- Compared to electricity markets, do you think it will be easier or harder to reduce CO2 emissions from transportation markets?
- Knittel discusses four channels through which petroleum consumption might be reduced. Which do you think will be the most important over the next decade?
Everyone please read the intro to each of these three papers. Then, for the reading specified for your group, please read enough to explain the research question and conclusion for the specific article.
Response questions All three papers are trying to estimating the same parameter: the demand elasticity for gasoline.
- Why is knowing the elasticity useful for evaluating climate policy (like a carbon tax)?
- Why is it so hard to estimate the elasticity of demand for gasoline?
We’re going to start our discussion of electric vehicles by looking and the drivers of demand. Please read the following three articles.
- The New York Times, Electric Cars Are Better for the Planet – and Often Your Budget, Too
- Max Auffhammer, “The EV revolution will be heavily subsidized”
- Lucas Davis, “An EV in every driveway?”
- builds on an earlier blog here (optional)
- What do you think the key determinants of electric vehicle demand are?
- The New York Times article suggests that EVs often save consumers money. Yet they have very low market shares. What are some reasons for that?
- Who do you think benefits most from EV subsidies, and why? (A couple sentences each)
Next we’re going to discuss the environmental benefits of EVs.
- Read this summary of an important article on the benefits of EV’s. Optional: If you are interested, the full paper is available here.
- Lucas Davis, “All charged up and no place to go”
- We’re currently heavily subsidizing electric vehicle adoption at both the state and local level. Are these subsidies actually a good idea?
- These subsidies typically focus on the “extensive margin” (new car purchases), not on the “intensive margin” (driving). Is looking at EV sales growth alone a sufficient measure of progress towards reducing gasoline consumption? (A couple sentences each)